It was a sea of green in the world’s stock market as the Santa rally continued for the third straight day. This came after Wall Street made a major recovery yesterday. The Dow had fallen by more than 600 points and managed to end the day higher. In Europe, the DAX and Stoxx rose by almost 2%. In Asia, the Shanghai and Hang Seng rose by 0.44% and 0.15% respectively. US futures pointed to a gain, with the Dow and S&P expected to gain by 106 and 15 points respectively.
The euro declined slightly against the USD after weaker-than-expected data from Europe. In Spain, the CPI for December rose by an annualized rate of 1.2%. This was lower than the expected 1.5%. The final reading of the third quarter GDP was 2.4%, which was lower than the expected 2.5%. On a quarterly basis, the economy expanded by 0.6%. The HICP for December rose by an annualized rate of 1.2%, which was lower than the expected 1.6%. The HICP is the harmonized index of consumer prices but contains a basket of products for all Eurozone member countries. In Germany, the CPI in December rose by 1.7%, which was lower than the consensus estimate of 1.9%.
The price of crude oil was little moved today ahead of key data from the Energy Information Administration. Investors expect the data to show crude oil inventories declined by more than 2.8 million barrels. This is after another decline of 497K barrels in the previous week. In recent months, the price of crude oil has declined sharply from the YTD highs as traders continue to worry about increased supplies and lower demand.
The EUR\USD pair declined slightly after disappointing data from Spain and Germany. The pair is now trading along the 1.1445 level, which is lower than the intraday high of 1.1473. On the hourly chart, the pair is above the 25-day and 50-day simple moving average while the RSI has remained above the 50 level and the momentum indicator has continued to weaken. The pair could see some major moves after important housing numbers from the United States.
The price of US crude oil was little moved ahead of the final inventory numbers for the year. The price is trading at $45 a barrel while Brent is trading at $52. On the hourly chart, the price is below the 50-day and 25-day simple moving average while the RSI has moved from 70 to the current 35. In the near term, the price will move in accordance with the inventory data that is released from the United States.
The USD\CAD pair continued its upward momentum and reached a high of 1.3638. This was close to the YTD high of 1.3680. On the eight-hour chart, the price is above the 50-day and 25-day simple moving average while the RSI is still above the overbought level. The Average Directional Index (ADX) has continued to move higher and is currently above 47. This is an indication that the price could continue the upward momentum into the coming year.